It's amazing how often principles of firms express their frustration at the lack of new business development, then excuse it by saying, "We're all so busy right now. Of course we know that will end but we’ll worry about it when things slow down."
Think about that statement. If a client said to you: "I know we’ve got about a 50% error rate in our manufacturing process right now, but we've got such a backlog of orders we just can’t focus on fixing it." How would you advise them? You'd probably point out to them the long-term implications of their short-term thinking, right?
We're all guilty of being too close to our own businesses to recognize mission critical issues and of rationalizing them to the back burner. Part of that rationalization can come in the form of false confidence in the power of the firm's "passive" marketing efforts like its website, case studies or white papers. While these are essential components of an overall marketing plan, unless there is a thoughtful, well-designed strategy to pro-actively get those materials in front of key decision-makers, such efforts can be virtually invisible to your new prospect base. The reality is that when given the choice between billable client work and non-billable activities—like networking, marketing or professional development—billable work will understandably win out every time. There are only so many hours in each day.
The lack of objectivity regarding our own businesses is certainly understandable. After all, our clients hire us to provide impartial insight, right? The best consultants provide objective, concise advice based on an unbiased view of the data. Let's look at some data:
• The sales cycle for new business for Management Consulting and IT Consulting firms can be as short as three months (for a pilot project or initial assessment) to as long as 18 months for major implementation/re-alignment initiatives (the good stuff).
• In firms that rely on the traditional "seller/doer" model to develop new business, the majority of new business is typically generated by senior partners and principles. In firms with between 15 and 25 people, 85% of new business will typically flow through five or fewer individuals.
• Research by the Alexander Group a professional services consulting, marketing, training, research and talent acquisition firm shows that only 13% of professional services managers are fully satisfied and feel their salespeople are selling the right offerings to the right clients in the right way.
• Kennedy Information’s 2005 study titled "Recruiting and Retention in the Consulting Profession" found that 85% of consultancies ranked the difficulties they expect to face in attracting and retaining highly talented consulting professionals over the next 12-18 months as "very challenging" or "challenging."
• For firms with dedicated sales teams, consider the following:
• According to The Hay Group, a Philadelphia-based management consulting company, employees "least committed to a company are its salespeople, 38% of whom planned to leave within two years."
• A 2006 study by Compensation Resources, Inc. (CRI), a compensation and human resource consulting firm found that the top reasons salespeople leave an employer is the desire for better opportunities and increased responsibilities, not just compensation.
So, with a sales cycle that is typically a year or more, uneven distribution of accountability regarding new business generation, almost universal misalignment regarding what services are being pitched to clients when measured against the need, an ongoing war for talent AND (maybe) a sales team that has one eye on the ball and one on Monster.com…What's a managing partner to do?
First of all, take your own advice. Try looking at your firm as a consultant, rather than as a partner or principal. How might you look to add value?
• Consider the value of even minor incremental improvements in the way your firm approaches the sales and marketing of its services and/or products.
• Consider the value of every potential sales lead that was squandered, lost or abandoned in the past 12 months (and if you can't identify any, you probably have a bigger problem here than you think).
• Consider the value of truly understanding your organization’s entire network of relationships and tying that "relationship map" to a structured, transparent, measurable account management process.
• Consider the long term value to your firm of attracting and retaining talent based on having a "Best of Breed" professional development process.
• Consider the value of increasing utilization rates for the most senior members of your team by as little as 5%.
After this mini self-assessment, avoid falling into the trap of "paralysis by analysis" that you counsel you clients against. Start doing something, but make it manageable and realistic based on your ability to allocate resources. Or bring in a firm whose expertise and advice you trust to help you jump start the process.
Baby Steps. Incremental improvements in what should be routine marketing or business development activities can be easy to achieve. Develop and post a marketing calendar throughout the firm. It should include a list of all conferences, trade shows and networking events where the firm plans to have representation over the next six to 12 months. It should also include a realistic schedule of publication or release dates for newsletters, white papers, etc. The emphasis on realistic is important. Remember, we're talking about incremental improvement here. Getting one well-written topical piece that positions your firm as a thought leader in your field trumps six hastily produced newsletters that re-hash articles you've had on your Web site over the past two years.
Nuggets of Gold. Squandered, lost or ignored sales leads are expensive. Arguably the single most common reason that large opportunities are missed is lack of effective and persistent follow-up. Treat every new business card, every Web inquiry, every phone call and certainly every referral as "nuggets of gold."
A review of all of the leads and inquiries that your firm has received in the past 12 months will point you in one of two directions: 1) a clear understanding of where your new business came from, which will provide a template for a measurable, repeatable process for the next 12 months, or 2) a clear understanding that you flat out don't know how many potential clients your team interfaced with this past year, which means you can't quantify how much unrealized revenue was left on the table.
A real time understanding of the pipeline of opportunities is an important differentiator between firms that are experiencing dynamic growth and those that are "stalled" on the growth curve. There are several key factors for professional service firms that warrant attention here:
1. Most new business, and certainly most repeat business, that professional service firms win is based on a reputation that is bolstered by solid interpersonal relationships.
2. Relationships require care and feeding.
3. The longer you've been in the business, the more relationships you have to manage and the more time it takes to care for and nurture them properly.
Keeping Up the Network. Many firms look to sales or time management training as a possible fix to help their staff develop the skills to manage crucial client and prospect relationships. Others turn to Customer Relationship Management or even Sales Force Automation tools in hopes that providing access to the right tools will encourage the effective capture of crucial business development information for the entire firm. The challenge with these often exercised options is that they require significant changes to the way the average consultant or technical specialist actually works on a daily basis. Any positive result, without consistent coaching and support, is often short-lived.
A more elegant and practical approach is to implement technologies and processes that require the least amount of behavior modification on the part of the consultant or business development leader. A thoughtful, well designed business development strategy should take into account your firms culture, current state, resources and growth goals. Implementing a well-designed strategy, with the appropriate level of ongoing support, validates that the firm is committed to a "best and highest use" model of resource allocation. These same processes can be effective in implementing a more structured Account Management process.
The key advantages of the "best and highest use" approach are 1) your team can focus on the work they are most passionate about 2) the firm gains valuable marketing intelligence as a natural by-product of the team's daily work and interaction with clients and prospects 3) fewer squandered new business opportunities and more billable revenue.
Keep Your Stars
The war for talent in professional services is becoming more costly every year. Talent churn, to some degree, is a fact of life for most firms. That doesn't mean you should accept it, however. Studies have shown that an often expressed concern of recently departed associates and principals is a lack of confidence or understanding of a clear career development path.
Almost all firms have training programs for new staff. Sometimes it's training by being thrown into project work early on. Often it's a series of training classes and "shadowing" of more experienced staff. A "one size fits all" training regime can be an Achilles heel that may cause more harm than intended. The advance of easy to administer psychometric profiling tools that can provide insight into learning styles, motivators and natural versus adapted behaviors can greatly enhance the effectiveness of your training and management plans for your rising stars.
Holding on to sales stars, for firms that have dedicated sales teams, can be an even bigger challenge. As the data suggests, people who are top performers in the sales arena tend to be more restless by nature and may be looking for the next best opportunity. The psychology behind retention of sales staff however really isn't that much different than for your newest MBA recruit. Understand who they really are. Make them feel like part of the team early on. Show them a pathway to success. Recognize their contributions to the growth of the firm. Keep them engaged with your project teams so that can really understand the kind of work you do.
Best and Highest Use (again)
While these resources and strategies are certainly not new concepts, it's particularly important in the professional service environment where talent IS the product. Talented professionals who are running multiple projects AND performing their internal duties for the firm are exceptionally prone to fall victim to the Superman Syndrome. The "kryptonite" for those of us prone to such behavior is that time runs out on something important every day. We can rationalize it away by saying it was a low priority item but we know better, don't we?
Thriving firms know how to delegate. Growing firms understand the true value of their time and delegate or outsource as much non-billable work as possible. Managing Partners of these firms recognize the value of a constantly full pipeline of opportunities and refuse to succumb to a mindset that allows for any deviation from their business development plan including limitations on their personal time and energy.
You help your clients to avoid the pitfalls of short term thinking every day. Enjoy the benefit of your own advice and counsel. Don't assume that your current crush of new business will last forever, and certainly don't use it as an excuse to let your business development efforts languish.
John A. Gregoire is a partner at Praxes Group, a business development consulting firm based in Westbrook, ME. Praxes' unique Outsourced Business Development model combines the most powerful elements of disciplines that touch on every facet of the business development spectrum. Mr. Gregoire can be reached at email@example.com.